Sunday, March 18, 2012

Predicting an escalation in property prices, top players in the realty sector said they had been ignored by the finance minister.

Lalit Kumar Jain, chief of the Confederation of Real Estate Developers’ Association of India (CREDAI), said the announcement on external commercial borrowings (ECB) for affordable housing was a minor respite but still meaningless. Jain, who is also chairman and managing director of Kumar Urban Development Ltd, added, “We contribute 6.5% to the GDP and expected a big boost from the budget for affordable housing through special schemes, an interest subvention of 5-7 % for LIG (low income group) and EWS (economically weaker section) housing and promotion of rental housing through tax exemption.”

Jain pointed out that the interest subsidy on home loans was too low. The Budget has extended the scheme of interest subvention of 1% on housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh for another year.

Gaurav Gupta, director, Omkar Realtors & Developers , lamented that the realty sector had got nothing to boost market and customer sentiments. “There are no indications of this sector being granted the status of an industry , which it much deserves . On the contrary, the increase in service tax will push up realty prices as the additional cost will be passed on to the buyers.”

Tata Housing MD and CEO Brotin Banerjee added, “Initiatives to make affordable housing available to a larger section of the society have only been met partially.”

There were some who welcomed the proposals. Sachin Sandhir, MD, RICS South Asia, felt it “exceeded expectations ” given the pressures on the fiscal situation.